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Debt | 12 Months Ended
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Dec. 31, 2020
Debt Disclosure [Abstract] |
Debt |
5. | Debt
As of December 31, 2020 and 2019, our long-term debt was as follows (in thousands):
|  | December 31, |  |  | December 31, |
|  | 2020 |  |  | 2019 |
2018 Credit Agreement: |  |  |  |  |  |  |  |
Term loan, due March 2023, interest at adjusted LIBOR plus 1.5% (combined rate of 1.75% at December 31, 2020 and 3.44% at December 31, 2019) |  | $ | 126,563 |  |  | $ | 136,875 |  |
Less – deferred financing costs |  |  | (1,155 | ) |  |  | (1,715 | )
2018 Term Loan, net of unamortized discounts |  |  | 125,408 |  |  |  | 135,160 |
$200 million revolving loan facility, due March 2023, interest at adjusted LIBOR plus applicable margin |  | — |  |  | — |
2016 Convertible Notes: |  |  |  |  |  |  |  |
Convertible Notes – Senior convertible notes; due March 15, 2036; cash interest at 4.25% |  |  | 230,000 |  |  |  | 230,000 |
Less – unamortized original issue discount |  |  | (3,021 | ) |  |  | (6,004 | )
Less – deferred financing costs |  |  | (1,170 | ) |  |  | (2,334 | )
2016 Convertible Notes, net of unamortized discounts |  |  | 225,809 |  |  |  | 221,662 |
Total debt, net of unamortized discounts |  |  | 351,217 |  |  |  | 356,822 |
Current portion of long-term debt, net of unamortized discounts |  |  | (14,063 | ) |  |  | (10,313 | )
Long-term debt, net of unamortized discounts |  | $ | 337,154 |  |  | $ | 346,509 |
2018 Credit Agreement. On March 5, 2018, we entered into a new $350 million credit agreement (the “2018 Credit Agreement”) with a consortium of banks to replace the amended and restated $350 million credit agreement entered into in February 2015, (the “2015 Credit Agreement”). The 2018 Credit Agreement provides borrowings in the form of: (i) a $150 million aggregate principal five-year term loan (the “2018 Term Loan”); and (ii) a $200 million aggregate principal five-year revolving loan facility (the “2018 Revolver”). With the $150 million proceeds from the 2018 Term Loan, we repaid the outstanding $120 million balance of the term loan under the 2015 Credit Agreement, resulting in a net increase of available cash by $30 million, a portion of which was used to pay certain fees and expenses in connection with the refinancing, and the remainder of which was used for general corporate purposes. The interest rates under the 2018 Credit Agreement are based upon our choice of an adjusted LIBOR rate plus an applicable margin of 1.50% - 2.50%, or an alternate base rate plus an applicable margin of 0.50% -1.50%, with the applicable margin, depending on our then-net secured total leverage ratio. We will pay a commitment fee of 0.200% - 0.375% of the average daily unused amount of the 2018 Revolver, with the commitment fee rate also dependent upon our then-net secured total leverage ratio. If the LIBOR rate is no longer available, then our interest rate under the Credit Agreement will be determined by the alternate base rate plus an applicable margin as discussed above. The 2018 Credit Agreement includes mandatory repayments of the aggregate principal amount of the 2018 Term Loan (payable quarterly) for the first, second, third, fourth, and fifth years, with the remaining principal balance due at maturity. The 2018 Credit Agreement has no prepayment penalties and requires mandatory repayments under certain circumstances, including: (i) asset sales or casualty proceeds; and (ii) proceeds of debt or preferred stock issuances. The 2018 Credit Agreement contains customary affirmative covenants. In addition, the 2018 Credit Agreement has customary negative covenants that places limits on our ability to: (i) incur additional indebtedness; (ii) create liens on our property; (iii) make investments; (iv) enter into mergers and consolidations; (v) sell assets; (vi) declare dividends or repurchase shares; (vii) engage in certain transactions with affiliates; (viii) prepay certain indebtedness; and (ix) issue capital stock of subsidiaries. We must also meet certain financial covenants to include: (i) a maximum total leverage ratio; (ii) a maximum first-lien leverage ratio; and (iii) a minimum interest coverage ratio. In conjunction with the 2018 Credit Agreement, we entered into a security agreement in favor of Bank of America N.A, as collateral agent (the “Security Agreement”). Under the Security Agreement and 2018 Credit Agreement, certain of our domestic subsidiaries have guaranteed our obligations, and have pledged substantially all of our assets to secure the obligations under the 2018 Credit Agreement and such guarantees. During the year ended December 31, 2020, we made $10.3 million of principal repayments on our 2018 Credit Agreement. As of December 31, 2020, our interest rate on the 2018 Term Loan is 1.75% (adjusted LIBOR plus 1.50% per annum), effective through March 31, 2021, and our commitment fee on the 2018 Revolver is 0.20%. As of December 31, 2020, we had no borrowings outstanding on our 2018 Revolver and had the entire $200 million available to us. In conjunction with the closing of the 2018 Credit Agreement, we incurred financing costs of $1.5 million. When combined with the remaining deferred financing costs of the 2015 Credit Agreement, financing costs of $2.8 million have been deferred and are being amortized to interest expense using the effective interest method over the related term of the 2018 Credit Agreement. Additionally, as certain lenders from the 2015 Credit Agreement chose not to participate in the 2018 Credit Agreement syndication group, we wrote-off $0.8 million of unamortized debt issuance costs and recognized a loss on extinguishment of that debt. 2016 Convertible Notes. In March 2016, we completed an offering of $230 million of 4.25% senior convertible notes due March 15, 2036 (the “2016 Convertible Notes”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2016 Convertible Notes are unsecured obligations and pay 4.25% annual cash interest, payable semiannually in arrears on March 15 and September 15 of each year. The 2016 Convertible Notes will be convertible at the option of the note holders upon the satisfaction of specified conditions and during certain periods. During the period from, and including, December 15, 2021 to the close of business on the business day immediately preceding March 15, 2022 and on or after December 15, 2035, holders may convert all or any portion of their 2016 Convertible Notes at the conversion rate then in effect at any time regardless of these conditions. For the 2016 Convertible Notes presented during this time frame, the settlement amount will be equal to the sum of the daily settlement amounts for each of the following 40 consecutive trading days during the related observation period. Under the terms of the 2016 Convertible Notes, we will adjust the conversion rate for any quarterly dividends exceeding $0.185 per share. As of December 31, 2020, the conversion rate was 17.6656 shares of our common stock per $1,000 principal amount of the 2016 Convertible Notes, which is equivalent to an initial conversion price of $56.61 per share of our common stock. As of December 31, 2010, none of the conversion features have been achieved, and thus, the 2016 Convertible Notes are not convertible by the holders. We will settle conversions of the 2016 Convertible Notes by paying or delivering, as the case may be, cash, shares of our common stock, or a combination thereof, at our election. It is our current intent and policy to settle our conversion obligations as follows: (i) pay cash for 100% of the par value of the 2016 Convertible Notes that are converted; and (ii) to the extent the value of our conversion obligation exceeds the par value, we can satisfy the remaining conversion obligation in our common stock, cash, or a combination thereof. As of December 31, 2020, the value of our conversion obligation did not exceed the par value of the 2016 Convertible Notes. Holders may require us to repurchase the 2016 Convertible Notes for cash on each of March 15, 2022, March 15, 2026, and March 15, 2031, or upon the occurrence of a fundamental change (as defined in the 2016 Convertible Notes Indenture (the “2016 Notes Indenture”)) in each case at a purchase price equal to the principal amount thereof plus accrued and unpaid interest. We may not redeem the 2016 Convertible Notes prior to March 20, 2020. On or after March 20, 2020, we may redeem for cash all or part of the 2016 Convertible Notes if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. On or after March 15, 2022, we may redeem for cash all or part of the 2016 Convertible Notes regardless of the sales price condition described in the preceding sentence. In each case, the redemption price will equal the principal amount of the 2016 Convertible Notes to be redeemed, plus accrued and unpaid interest. The 2016 Notes Indenture includes customary terms and covenants, including certain events of default after which the 2016 Convertible Notes may be due and payable immediately. The 2016 Notes Indenture contains customary affirmative covenants, including compliance with terms of certain other indebtedness of the Company over a defined threshold amount. The remaining original issue discount (“OID”) related to the 2016 Convertible Notes is being amortized to interest expense through December 15, 2021, the first date the 2016 Convertible Notes can be put back to us by the holders. Estimated Maturities on Long-Term Debt. As of December 31, 2020, the maturities of our long-term debt, based upon: (i) the mandatory repayment schedule for the 2018 Term Loan; and (ii) the first initial settlement date of the 2016 Convertible Notes, was as follows (in thousands):
|  | 2021 |  |  | 2022 |  |  | 2023 |  |  | Total |
2018 Term Loan |  | $ | 14,062 |  |  | $ | 15,000 |  |  | $ | 97,500 |  |  | $ | 126,562 |
2016 Convertible Notes |  |  | — |  |  | 230,000 |  |  | — |  |  |  | 230,000 |
Total long-term debt repayments |  | $ | 14,062 |  |  | $ | 245,000 |  |  | $ | 97,500 |  |  | $ | 356,562 |
Deferred Financing Costs. As of December 31, 2020, net deferred financing costs related to the 2018 Credit Agreement were $1.2 million and are being amortized to interest expense over the related term of the 2018 Credit Agreement (through March 2023). As of December 31, 2020, net deferred financing costs related to the 2016 Convertible Notes were $1.2 million, and are being amortized to interest expense through December 15, 2021, the first date the 2016 Convertible Notes can be put back to us by the holders. The net deferred financing costs are presented as a reduction from the carrying amount of the corresponding debt liability in our Balance Sheets. Interest expense for 2020, 2019, and 2018 includes amortization of deferred financing costs of $1.9 million, $1.8 million, and $1.9 million, respectively. The weighted-average interest rate on our debt borrowings, including amortization of OID, amortization of deferred financing costs, and commitment fees on the revolving loan facility, for 2020, 2019, and 2018, was approximately 5%, 6%, and 5%, respectively.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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